Consumer eViews

Volume 2, Number 31, August 1, 2005   

Homeowners insurance is an important Florida issue and we are all looking for the best coverage at the best price. Unfortunately, some scam artists are targeting homeowners by offering insurance deals that are too good to be true. Don't be a victim of unlicensed "insurers." Learn how to protect yourself from bogus companies offering illusory insurance coverage.

Aggressive advertising about low rates may not tell the whole story. Remember, if it sounds too good to be true, it probably is. Beware of prices that are significantly lower than others you’ve been quoted and check out the company’s brochure and other materials.  

But most important of all, make sure the company is authorized to sell insurance in Florida.  When Florida-licensed insurance companies fail, policyholders are protected by a guaranty fund to cover outstanding claims.  Florida law requires licensed companies to participate in the guaranty fund.  However, unlicensed companies are not covered by the fund, so recovering unpaid claims can be difficult. 

The Florida Department of Financial Services is conducting a statewide public education campaign warning consumers and agents to “Verify Before You Buy.”  As a result, we’re getting more calls from agents wanting to verify that insurance entities soliciting them are properly licensed.

Consumers may visit to find out if an insurance company or insurance agent is licensed in Florida, to file a complaint or to learn more about unlicensed insurance. Florida consumers may also call the Department of Financial Services’ toll-free consumer helpline at 1-800-342-2762. The helpline is available Monday through Friday, 8 a.m. to 5 p.m. 

Remember, knowledge is the best protection.  Verify before you buy and protect your family, your property and your investment. 

                     -- Tom Gallagher


One-life group open enrollment starts today, August 1, and continues through August 31.  A sole proprietor that applies during the month of August and is deemed eligible for coverage will have a policy effective date of October 1.  This is the month for new one-life groups to apply for coverage and for existing one-life groups to shop around and/or switch carriers if they wish.  Insurers and HMOs have to offer small group Standard and Basic policies to one-life groups.  The benefits provided under these two standardized policies can be viewed on the website at Florida Small Employer Benefit Plan.

All companies and HMOs that participate in the small group market must accept all eligible one-life groups during the month of August.  A list of insurance companies offering coverage is posted on the Department of Financial Services’ website at this link: Small Group Market Carriers.

The one-life group coverage is guaranteed issue if the sole proprietor can meet the statutory requirements. Florida Statute 627.6699(3)(u) states that a self-employed individual must have taxable income as indicated on IRS Form 1040, Schedule C or F, in one of the two previous years.  Under section (3)(v), it states that a small employer, including sole proprietors, must be actively engaged in business, have its primary place of business in this state, and employ at least one person on the first day of the plan year.

With the passage of the Affordable Healthcare for Floridians Act last year, coverage options for employers include health savings accounts (HSAs) or health reimbursement arrangements (HRAs.)  HSAs, which operate like Individual Retirement Accounts (IRAs), allow people to save their own money in a tax-free account for use on health related expenses. If the money is not spent, it will roll over annually and continue to accumulate until the policyholder is age 65 at which time the money can be used for any purpose.

Consumers are encouraged to contact the department’s toll-free consumer helpline at 1-800-342-2762 to request a free copy of our health insurance consumer guide.  It can be downloaded at Health Insurance: A Guide for Consumers.



Investigators from the Department of Financial Services Division of Workers’ Compensation announced the results of a recent two-day sweep of construction sites in the state.  There were 848 site visits made during the sweeps resulting in 100 stop work orders (SWOs) being written against employers without legitimate workers’ compensation coverage. 

Under state law, businesses engaged in the construction industry with one or more employees must provide workers’ compensation coverage, which protects workers who are injured or killed on the job.

“Contractors who provide coverage to protect their workers continually tell us how difficult it is to compete with those who cheat the system,” said Florida’s Chief Financial Officer Tom Gallagher.  “We have seen workers’ compensation rates fall and the availability of coverage increase in recent years largely due to the efforts of our workers’ compensation investigators to root out fraud and abuse.”  

Twenty-five supervisors and investigators from Miami, Plantation, & Ft. Myers conducted sweeps in Miami.  That operation made 333 contacts and wrote 35 SWOs.  Thirty-six supervisors and investigators from Jacksonville, Pensacola, Orlando and Tampa conducted sweeps in the Orlando area.  They made 515 contacts and wrote 65 SWOs.  In many cases where it was difficult to establish whether adequate coverage had been obtained, a request for business records was issued. 

Under an SWO, a business must immediately cease all operations.  The SWO is lifted once the employer obtains the proper coverage and pays a civil penalty equal to the amount of 1.5 times the workers’ compensation premiums avoided.  Employers who violate an SWO face a penalty of $1,000 per day of violation and may also face criminal charges. 

During the Miami area sweep an investigator found three men installing concrete fixtures at a home in Homestead.  None of the men had workers’ compensation coverage and an SWO and a request for records was issued.  Any fines in the case should be minor as the stone design company only began business in late June.

That was not the case in an Orlando area investigation.    Two workers engaged in block work had a hazy recollection of whom they worked for, only being able to remember the first name of their employer.  An alleged employer eventually came to the site, but when instructed of the ramifications of the insurance fraud laws, he admitted they were his subcontractor’s employees and summoned that person to the site. It was then discovered this employer had approximately 30 employees at other job sites that were also not covered.  A subsequent review of his business records revealed over $500,000 had been paid to workers, without providing workers’ compensation coverage, resulting in a fine of over $167,000. 

During the 2003 legislative session, lawmakers made several important reforms to the workers’ compensation system in an effort to stem the tide of rising premiums.  As part of the reforms, the Division of Workers’ Compensation was granted greater enforcement authority to ensure businesses provide coverage for their employees.  Many of the violations uncovered during this week’s sweep fall under the new authority. 

To increase competition among businesses operating in Florida, the Legislature in 2003 required:

  • Out-of-state businesses operating in Florida pay Florida-approved workers’ compensation rates for coverage.  This prevents non-Florida businesses from gaining an unfair advantage over locally owned businesses.
  • Employers who misrepresent the number or classification of their employees be subject to an immediate stop work order.  Previously, a criminal investigation was required to take action against the employer. 
  • Employers wishing to exempt themselves from coverage requirements obtain a new exemption, providing greater tracking ability to state regulators.  This measure was aimed at preventing contractors from claiming that employees were subcontractors who were exempt from coverage, thereby avoiding payment of premiums and gaining an unfair advantage over competition.

The Legislature also recognized the value that the Division of Workers’ Compensation investigators bring to Florida and more than doubled the number working in the state to 71.


The Florida Department of Financial Services warned that it has received reports of an unlicensed entity selling bogus homeowners insurance in Florida.  Global Insurance Group, headquartered in Aventura, FL., has been aggressively advertising that it offers the lowest windstorm insurance rates in Florida. 

When asked about its licensing status, a company representative reported that it sells coverage through a company named Global Property and Casualty Insurance.  Neither entity is either licensed or authorized to sell insurance in Florida.  

“Floridians need to be on guard against this kind of activity,” said Florida’s Chief Financial Officer Tom Gallagher.  “Last year’s hurricanes taught us how devastating and expensive property losses can be.  It is critical for Floridians to make sure an insurance company is licensed.” 

If a licensed insurer becomes insolvent all outstanding policyholder claims will be paid through the state guarantee fund.  However, if a company is not authorized, any losses sustained cannot be recovered from the fund. 

To check on the license status of a company or agent, consumers should visit, and click on Verify Before You Buy, or call the Department of Financial Services' Helpline at 1-800-342-2762.


Miami couple charged with selling fake insurance to truckers

Tom Gallagher, Florida’s chief financial officer, announced the arrest of Rosa Bajdor of Miami on charges of transacting insurance without a certificate after she was discovered paying an accident claim without a license.  Also implicated is Bajdor’s husband, Peter, who is expected to surrender later this week.  Additional charges are forthcoming.

In an investigation carried out by the Department of Financial Services Division of Insurance Fraud, the Bajdors were discovered to have sold fraudulent liability insurance certificates to local truck drivers.  Both previously held licenses to sell insurance in Florida that were revoked pursuant to a prior agreement with the department.

“I am committed to making sure Florida residents are protected against fraudulent insurance scams,” said Gallagher, who oversees the department.  “We will continue to investigate and prosecute anyone who commits insurance fraud.”

The investigation uncovered a scheme whereby the Bajdors would sell fraudulent insurance certificates to local truckers for $500 and would use the proceeds for personal gain.  In one case, the suspects actually paid a claim without the requisite license. 

 The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance.  Anyone with information about this case or another possible fraud scheme should call the department's Fraud Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to an arrest and conviction.

Consumer Services HelpLine
(800) 342-2762.